Tell Me About........

[Julie]

Commercial property.

Going rate for rent.  Lease terms.  Whatever you got 'cuz I'm stupid about it.  I just need someplace to start.  I know everything's local but I just need some ideas on where to start.

We bought Ms. MaryAnn's building when she retired.  Little 500 square foot building.  I've been approached about renting it.  Photographer starting out is looking for commercial space.  I don't think this is going to be nearly big enough but there's another building down the street for sale.  Thought I might shop it to her as well.  I'm not above buying something, renovating and making it work.  In our little town, I can pick up what little commercial space there is left for less than $10K, renovate, rent and pay a hell of a lot less in taxes than residential property.

I've been approached by someone else on Main Street wanting to sell and retire.  HUGE building that would make a great office suite type set up.  But they want $25K for the building and we'd probably put that much in just rehabbing.  I can see it becoming a large sucking money hole and taking a whole lot of time which is what I don't have.

I guess if I can't find residential property I'll start looking at commercial.

[Phillip]

Alot of beginning small business people are not going to know alot about commercial leases, like CAM charges, and triple net leases ect.
 In my small town there is no shortage of commercial spaces available, so I have found a simple commercial lease that did'nt look too intimidating works well because they can go down the street and find someone that will do a verbal lease just to get it rented.
One restaraunt I had I did a progressive lease, 1st 6 months was $XXX, then went up by $X then , after 6 months another increase, ect. This was marketed to help them start their business, and as profits grew the rent would increase accordingly.
Another space I had I rented to a computer retail and repair place, This was  4 walls and a floor, no improvements. They remodeled to suit what they needed, they installed new double pane aluminum commercial widows, and commercial door, wired & plumbed, all on their dime. After they closed all the improvements were mine, We turned it into our rental business office. That worked out well.
I hope this helps.
Phillip

[OrEGone]

Renovating commercial can just simply be HELL. You start complying with handicap and parking regulations that just don't stop. Your 500 sq ft place will need 300 sq ft to just get a handicapper in to the potty.
Glad to hear your local economy is booming. Not only are downtown shops here empty. We just went to the new (10 year old) mall with Macy's and all. 12 out of 30 spaces are vacant. Big name stores closed up.
My commercial remodel is now over two years in construction with 8 months of waiting on permits. They say it is all my fault. Complaining just got me more delays. I recently waited two weeks for them to approve the design of the required covered 6x12' bike parking in the back.

[Phillip]

Sorry to post again, but I keep thinking of things. Depending on the size of the commercial building you are looking at, and the potential in your area, You may think about just basic remodels for the first few, just to get cash flow and to see what people are wanting. Then you can use this info. for the next few.

Also if it is possible, you can route all telephone and ethernet into one office, and branch to all the others.
This will give a central location for shared secraterial(sp?) and receptionist work.
It could be a business opprotunity for someone in itself, and give you a marketing advantage being able to offer this service. (Google business incubaters).

You might be able to make a space for a break room with your own vending business.

These are some of the ideas I've had , In case I wanted to take on another building.

[Julie]

Renovating commercial can just simply be HELL.

This is what I'm trying to avoid!!! 

I wouldn't say business is booming.....we only have about 4 blocks of Main Street commercial space.  Several empty lots.  Most buildings even with businesses in them have been let go and need roofs.  When you walk thru them on a rainy day and the ceilings are dripping you would think this would be a great bargaining chip but it's not.  Have been in some that mold has been growing up the walls because of the roof and the owner wouldn't deal.

Best case scenario is that I provide 4 walls, floor and roof.  Tenants would renovate to their specs.  Not sure if this is doable or not.  I would prefer to start small and see what develops.  I also want to keep things simple with leases and improvements.  I certainly don't want to scare a tenant off with a long term lease but at the same time if they aren't willing to have a little skin in the game I have a hard time taking them and their business plan seriously.

Great info guys.  As always, I appreciate the insight, ideas and opinions.

[Mike (SWMO)]

I did kind of like Phillip.  Rented the building, let them remodel as they needed but I did the electric cause they are renters.  I may not be good at it but the place hasn’t burned down YET.  Charging small amount of rent to let them get their business going then will increase rent as time goes by and they do better.  Something is better than nothing.  We haven’t had a new business of any kind start here in ages.

As was mentioned, watch your insurance (see the post Sean put up a few days back), parking, usage permits and anything else the ney sayess can think of.

Ore - you must be rubbing off on the yahoos (known as city fathers) here in my little hamlet.  I bought the property next to this one.  Planning on starting a car / motorcycle sales lot there.  Need to rezone from residential to commercial.  Everything going as planed then city decides they need to have the planning and Zoning look at it.  What P&Z.  They didn’t even have one.  So everything is on hold until they can form a committee, have a meeting, do their thing and then decide what I can do.  I figure 3 or 4 months.  I may just scrap the whole idea.